Trade agreements triggered by US tariffs

When President Trump reimposed tariffs in 2025, global trade and supply chains faced their most dramatic disruption in decades.

Major trading nations responded by forging ambitious new partnerships that fundamentally reshaped international commerce. From India's historic pivot toward Europe to China and Canada's surprising détente, countries accelerated negotiations that had languished for years, driven by an urgent need to diversify away from volatility in the American market. Here are the top trade agreements triggered by US tariffs.

India and the United Kingdom signed their landmark free trade agreement on July 24, 2025, after years of stop-start negotiations that suddenly gained momentum as both countries faced punishing US tariffs. The deal provides 99% duty-free access for Indian exports to the UK and eliminates 90% of tariffs on UK goods entering India, with 85% reaching zero-duty status within a decade.

The agreement opens critical new lanes: Indian textiles, agricultural products, marine goods, and gems flow to UK markets duty-free, while British whisky, automobiles, and auto components gain unprecedented access to India's massive consumer base.

The strategic timing wasn't coincidental. With US tariffs on Indian goods reaching 50% by August 2025—among the highest imposed on any trading partner—India needed alternative markets desperately. The UK, facing its own 30% US tariff wall, sought reliable sourcing partners outside China. Trade analysts project the agreement will add £25.5 billion annually to bilateral commerce by 2040.

Dubbed the "mother of all deals" by EU Commission President Ursula von der Leyen, the India-EU FTA concluded negotiations in November 2025 and was formally announced on January 27, 2026.

This agreement dwarfs most regional trade pacts, linking India's 1.4 billion consumers with the EU's 450 million across a $27 trillion combined market. India secured preferential access across 97% of EU tariff lines covering 99.5% of trade value, while making unprecedented concessions, including slashing automotive tariffs from 110% to just 10% over time and eliminating duties on auto components within 5-10 years.

Under the agreement, Indian tariffs on 30% of goods traded with the EU will fall to zero immediately, while India will scrap duties entirely on most EU industrial imports, including machinery and electrical equipment.

European automakers can now establish Indian production bases with more favorable export economics, while Indian pharmaceutical and chemical manufacturers gain streamlined access to European markets.

Perhaps the most unexpected development in the tariff-triggered realignment came on January 16, 2026, when China and Canada—whose relationship had deteriorated badly in prior years—announced an "Economic and Trade Cooperation Roadmap" during Prime Minister Mark Carney's visit to Beijing. The deal pragmatically addresses specific tariff pain points while creating new trade corridors, particularly in the automotive and agricultural sectors.

Canada agreed to restore most-favored-nation tariff rates for up to 49,000 Chinese electric vehicles annually, reducing tariffs from over 100% to just 6.1% under this quota. Canada also suspended tariffs on certain Chinese steel and aluminum products until the end of 2026. In return, China reduced tariffs on Canadian canola seeds from 84.8% to around 15% by March 1, 2026, and removed or lowered discriminatory tariffs on Canadian seafood, canola meal, and agricultural products.

President Trump threatened to impose 100% tariffs on all Canadian goods if Canada finalized the China agreement.

The EU and Mexico concluded negotiations on their modernized trade agreement on January 17, 2025, updating a framework that had been in place since 2000. After President Trump announced 30% tariffs on the EU and Mexico, effective August 1, 2025, both parties fast-tracked finalization: the European Commission adopted proposals for signature on September 3, 2025, with official signing scheduled for February 2026. The timing makes the strategic motivation crystal clear: both needed alternatives to the volatility of the American market.

The agreement eliminates additional tariffs and technical barriers across €81.7 billion in annual goods trade and €22 billion in services trade.

The India-EFTA agreement entered into force on October 1, 2025, linking India with Switzerland, Norway, Iceland, and Liechtenstein—smaller markets but strategically important for high-value goods and investment capital. What makes this deal extraordinary isn't just tariff reductions; it's the $100 billion investment commitment from EFTA nations over 15 years, with $50 billion arriving in the first decade. This capital injection is explicitly tied to generating one million direct jobs in India, with provisions requiring investment in manufacturing, infrastructure, and technology sectors.